Overseas Market Report – Stocks End Higher as Rate Hike Worries Ease
Stocks ended higher Friday as oil prices rose and investors continued to process Fed minutes from Thursday that showed the central bank in no hurry to raise rates.
Import price fell by a seasonally adjusted 0.1% in September, a much smaller decline than the 1.6% fall seen in August. Prices are off 10.7% year-over-year, mainly due to lower energy prices.
At market close the Dow, S&P 500 and NASDAQ were up 0.2%, 0.1% and 0.4% respectively.
Shares of Gap (GPS) fell over 5% today after the firm provided disappointing guidance and sales results late Thursday. The firm said September sales were down 1% due to Banana Republic weakness and a strong dollar. Management also said that gross margins would be below analyst expectations.
For Australian ADRs listed on the NYSE, BHP Billiton added 44 cents (1.19%) to $37.76, ResMed gained 39 cents (0.72%) to $54.30, Telstra Corporation added 14 cents (0.69%) to $20.51, Spark New Zealand gained 28 cents (2.82%) to $10.20 and Westpac added 10 cents (0.45%) to $22.48.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.09% and the 5-year yield was 1.40%.
European markets closed with the biggest weekly gain since the beginning of the year.
The FTSE, DAX and CAC 40 all closed higher at 0.7%, 1% and 0.5% respectively.
Asian markets closed the week in the green. Japan's Nikkei added 1.6%, whilst Hong Kong's Heng Seng gained 0.5%.
China's Shanghai Composite added 1.27% whilst India's Sensex gained 0.89%.Asian markets were also higher.
Australian Market Report – Local Markets Expected To Open Lower
Ahead of the local open SPI futures were 18 points lower at 5,249.
Friday 09 October – close. The Australian market extended its recent rally to a fifth consecutive day, supported by strong gains in resources stocks, with the big lenders pushing the market higher. All sectors ended positively with energy and materials being the best performers. The Australian dollar appreciated against most major currencies.
The All Ordinaries added 67.80 points to 5,309.20 while the S&P/ASX 200 rose 69.30 points to 5,279.70.
Genworth Mortgage Insurance Australia (GMA)
Genworth Mortgage Insurance Australia announced on 9 October 2015 that Ms Ellen (Ellie) Comerford is retiring as Chief Executive Officer and Managing Director, and as a member of the Board of Directors, but will remain employed in an advisory role until 31 May 2016 to assist with transitional matters. Ms. Georgette Nicholas, presently Chief Financial Officer, has been appointed Acting CEO effective from 9 October 2015. In conjunction with this move, Luke Oxenham, Director Corporate Finance and Investor Relations is being named Acting CFO. The Board will conduct a global search process for a candidate to succeed Ms. Comerford, under which internal and external candidates will be considered. GMA lifted 3 cents to $2.48.
Telstra Corporation (TLS)
Telstra Corporation announced that The Australian Competition and Consumer Commission (ACCC) has released its final decision on the prices that other operators pay to use the Company's copper network to provide telecommunications services to consumers. The final decision will require a one-off uniform fall of 9.4% in access prices from current levels for the seven fixed line access services. This revises the 9.6% fall estimated in the June 2015 further draft decision. The new prices will apply from 1 November 2015 until 30 June 2019. The ACCC's final decision also covers connection and disconnection charges and a decision to not exempt the CBD areas from coverage under the final access determinations. TLS gained 4 cents to $5.64.
In This Issue
Evolution Mining (EVN) | Hold
Evolution Mining (EVN) delivered a solid September Q, producing 174koz @ All-in cost (AIC) A$1,015/oz v (Argonaut forecast 162koz @ AIC A$1,237/oz). Assuming full ownership of Mungari and Cowal for the full Q, translates to a normalised quarterly production of ~217koz. Whilst FY16 guidance was maintained, EVN is likely to deliver a cost guidance upgrade early CY16, as current run rate implies FY16 production of ~821koz @ AIC ~A$1,000/oz (annualised rate of ~865koz). Group cash and debt were at A$58.3m and A$530m respectively. The Company incurred acquisition / integration costs of A$22.8m (~A$130/oz) during the September Q. Argonaut maintains a HOLD recommendation and is reviewing its target price.
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